Sunday, September 22, 2013

What is Public Private Partnership (PPP) and why is it important for a developing country like Bangladesh

Public Private Partnership (PPP) is the most important topic among developing
countries of the world. Without infrastructural development it won’t be
possible for a developing country to switch from developing to developed
country. For rapid infrastructural
development public private partnership is the most. Public Private Partnership is
the collaborative work of Government and Private Companies. A contract has been
made between Private Party and Government where the private party provides a
public service or project and assumes substantial financial, technical and
operational risk in the project. Public Private Partnership is being considered
worldwide as a unique window for the development of infrastructure sector for
the countries.

Bangladesh
is the latest country that has entered into the new investment paradigm of the
PPP over last 4 years. Bangladesh Govt. has allocated lots of funds for
implementing PPP projects for the last several years but has failed. The
example of PPP projects are Dhaka Elevated Expressway and Gulshan- Jatrabari
fly over. In PPP model, public and private sectors jointly undertake large
projects on partnership basis. Through this model the private is encouraged to
participate in large and long term infrastructural development. In PPP model,
private sector arranges resources or bears the cost of building infrastructure.
Under this model project are usually long term in nature and private
entrepreneurs get recovery of their investment through toll revenue collection.
The government, the private sectors investors and public can get all benefit if
private sector can be enticed into infrastructure development under PPP. Since
the private sector invests in the infrastructure development, there is no need
for the government to take loans and pay interest.

This does not excess
pressure on money market, thereby diminishing upward pressure on interest rate
and inflation. PPP facilitates the expansion of business. The private sector
can engage in sectors where conventionally public sector invests. Since the
private sector has to bear the cost resulting from accidents and damages, they
use reliable and quality materials to ensure safety. Like many other successful
government of different countries, our govt. should take more initiatives to
make PPP programmer successful.